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Foreign Direct Investment and Economic Growth: Co-Integration and Casualty Analysis of Nigeria

Author

Listed:
  • Henry Okodua

    (Covenant University)

Abstract

The FDI-growth nexus in developing countries has been of tremendous interest to a number of researchers. The inconclusive debate on the relationship between foreign direct investment (FDI) and economic growth has continued to inspire this interest. In Nigeria, the sustainability of the FDI-growth relationship is of utmost concern in the development discuss. This study employs the Johansen cointegration framework and the vector error correction technique to shed more light on the problem. The empirical results show that a long-run equilibrium relationship exists between economic growth and FDI inflows. The study also revealed a unidirectional causality from FDI to economic growth.

Suggested Citation

  • Henry Okodua, 2009. "Foreign Direct Investment and Economic Growth: Co-Integration and Casualty Analysis of Nigeria," The African Finance Journal, Africagrowth Institute, vol. 11(1), pages 54-73.
    • Handle: RePEc:afj:journl:v:11:y:2009:i:1:p:54-73
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    Citations

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    Cited by:

    1. A.T. Odeleye & Ndubuisi Chidi Olunkwa, 2019. "Industrialization: Panacea for Economic Growth," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(2), pages 45-51, June.
    2. Aderemi Timothy Ayomitunde & Alaka Adedayo & Ebere Chidinma Edith, 2020. "Nexus between Foreign Direct Investment and Oil Exports in Nigeria: An Empirical Perspective," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 6(3), pages 150-156.
    3. Emeka Nkoro & Allen Owusibo Furo, 2012. "Foreign Capital Inflows and Economic Growth in Nigeria: An Empirical Approach," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 1, November.
    4. Monireh Rafat, 2018. "The Interactive Relationship between Economic Growth and Foreign Direct Investments (FDI): A VAR Analysis in Iran," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 22(1), pages 163-185, Winter.
    5. Kolawole Olayiwola & Henry Okodua, 2013. "Foreign Direct Investment, Non-Oil Exports, and Economic Growth in Nigeria: A Causality Analysis," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(11), pages 1479-1496, November.
    6. Idode Patrick & Sanusi Gbenga, 2019. "Financial Globalisation and Economic Transformation in Africa: Evidence from Nigeria," Financial Sciences. Nauki o Finansach, Sciendo, vol. 24(1), pages 7-24, March.
    7. Prosper Ebruvwiyo Edoja & Goodness C. Aye & Orefi Abu, 2016. "Dynamic relationship among CO2 emission, agricultural productivity and food security in Nigeria," Cogent Economics & Finance, Taylor & Francis Journals, vol. 4(1), pages 1204809-120, December.
    8. Mathy Sane & Miroslav Hajek & Joseph Phiri & Jamilu Said Babangida & Chukwudi Nwaogu, 2022. "Application of Decoupling Approach to Evaluate Electricity Consumption, Agriculture, GDP, Crude Oil Production, and CO 2 Emission Nexus in Support of Economic Instrument in Nigeria," Sustainability, MDPI, vol. 14(6), pages 1-15, March.
    9. Philip Ifeakachukwu Nwosa & Temidayo Oladiran Akinbobola, 2016. "Capital Inflows and Economic Growth in Nigeria: The Role of Macroeconomic Policies," African Development Review, African Development Bank, vol. 28(3), pages 277-290, September.

    More about this item

    Keywords

    FDI; Economic Growth; Johansen Cointegration Framework; Vector Error Correction; Casuality;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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